NCTA: Data Cap Bill Is Ill-ConceivedSays legislation ignores benefits of usage-based pricing 12/21/2012 10:29:11 AM Eastern
The National Cable and Telecommunications Association on Friday
slammed the just-introduced Data Cap Integrity Act, which would mandate
standards for measuring capacity and put economic restrictions on usage-based
"Regrettably, this ill-conceived legislation ignores
the substantial pro-consumer benefits of usage-based pricing," NCTA said
in a statement. "While congestion management may be one effect of tiered
pricing, the primary benefits are consumer choice and fairness. Usage tiers
give consumers more choices to better fit their bandwidth needs, and they
rightly distinguish between low-volume users and high-volume users as is true
for many products and services."
NCTA last week looked to get ahead of the issue, releasing a paper
that concluded that differential pricing increased economic welfare in most
"Tiered pricing is common throughout our economy,
consumers both understand and appreciate it and the FTC and FCC have said it is
sensible and fair," said the trade group.
On Thursday, Sen. Ron Wyden (R-Ore.) introduced the data cap
bill, which he said would give consumers more control over their data usage in
the wake of data caps imposed by some ISPs. The bill would also mandate industry-wide
data measurement accuracy standards and impose "disciplines" to ensure
that data caps are only used to manage network congestion, not to "extract
monopoly rents," citing a New York
Times editorial opining on that subject.
FCC chairman Julius Genachowski has said usage-based pricing
can be a useful tool -- the FCC's network neutrality rule order cited that
upside -- and was consistent with "driving efficiency, investment, and
faster and more robust network infrastructure," but he has also suggested
those tools could be misused.
a speech in September, the chairman made a point of saying that consumers
need sufficient "monthly" broadband capacity so that families don't
have to fight over who gets to do homework or have a remote health checkup or
stream video, and "monthly" capacity to make sure that the e-commerce
goods flow freely.
He said he understood the challenge to ISPs of managing the
growing demands on their networks while earning enough to invest in upgrades and
expansion, both FCC goals. But he also said he expects monthly usage limits to
rise and the cost-per-bit of those usage-based plans to decrease as technology